Kaohsiung faces criticism over draft petrochemical regulations

A set of draft rules has been published by the Kaohsiung government to regulate the petrochemical industry in the Taiwanese city. The regulations order companies that bury petrochemical pipelines in Kaohsiung to move their headquarters to the city by the end of 2016, or risk losing access to the pipelines. The ‘Rules on Existing Industrial Pipelines’ will be implemented pending approval by the city council and review by the central government.

According to the city government, there are currently 89 underground petroleum pipelines in downtown Kaohsiung, owned by 13 companies. Only three of these companies, Formosa Petrochemical Corp., LCY Chemical Corp. and Grand Pacific Petrochemical Corp, are headquartered in Kaohsiung. The aim of the new regulations is to encourage cooperation between the companies and the government, and to ensure Kaohsiung's safety following gas explosions last year, which killed 30 people and caused extensive damage to the city.

However, the government has faced backlash over the decision, with the Ministry of Economic Affairs noting that the regulations counteract the spirit of free economy, are probably unconstitutional, and will damage Taiwan's investment climate.

Taiwan’s petrochemicals industry has faced roller coaster market conditions for the past 18 months mirroring trends in the fortunes of the global petrochemicals sector. This article traces the industry’s progress and considers its future.